30-year mortgages drop

Friday, June 24, 2005 | 9:41 a.m.

WASHINGTON -- Rates on 30-year mortgages resumed their decline this week, falling for the 10th time in the past 12 weeks.

Mortgage giant Freddie Mac said Thursday its weekly survey showed that rates on 30-year, fixed-rate mortgages averaged 5.57 percent, down from 5.63 percent last week. It was the second-lowest level recorded this year.

The decline in mortgage rates over the past two months has helped push sales of both new and existing homes to record levels this year. The National Association of Realtors reported Thursday that sales of previously owned homes declined a tiny 0.7 percent in May after hitting an all-time high in April. However, the May sales pace of 7.13 million units at a seasonally adjusted annual rate was the second-highest level on record.

"The housing market still has a good head of steam," said Frank Nothaft, chief economist at Freddie Mac.

"Given that mortgage rates aren't expected to move too much in either direction any time soon, we fully expect the housing market will continue to thrive well into the foreseeable future," Nothaft said.

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